In the cities where some form of rent control has been introduced, apartment cap rates have increased over the last year, according to Real Capital Analytics.

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NEW YORK—Rent control has become a highly-charged issue in many cities and states. Oregon and New York have passed measures placing caps on rent increases; California is considering a similar measure to name a few examples.

Indeed, housing affordability is a serious issue but rent control may not be the best way to address this concern, concludes an analysis by Real Capital Analytics. Already, writes Jim Costello, new demands for rent control are repricing assets in a way that may lead to loan defaults and lower housing availability over the long run. Namely, he writes, “Investors and lenders are repricing assets in markets where rent control exists or is being introduced.”

Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.